Elixir Energy Ltd (ASX:EXR) was as much as 30.44% higher on entering a memorandum of understanding (MoU) with Japanese renewable energy company SB Energy Corp to cooperate on research and development for its green hydrogen production project in the Gobi Desert of Mongolia.
This MoU provides a two-year framework under which the two parties will work together to pursue a small-scale pilot project as the foundation for proving a much larger development.
The companies intend to proceed with certain pre-feasibility studies in order to first realise the small-scale pilot project with the eventual goal of jointly developing a gigawatt-class green hydrogen production project.
Moving forward, Elixir is responsible for water resources and government/local relations whilst SBE will engage with offtakers, technology providers and financiers.
The market welcomed the news with EXR shares trading as high as $0.150 intraday, up 30.44% from the previous close.
“Tier One green hydrogen export project”
Elixir managing director Neil Young said: “We are delighted that the potential of our Gobi H2 project has been validated by the signing of an MoU with a company of the quality of SoftBank Energy.
“This provides a foundation for a growing partnership to aggressively pursue what we consider to be a potential global tier-one green hydrogen export project.”
Potential synergies
Elixir owns the Nomgon IX Coal-bed Methane project, which is in the South Gobi region of Mongolia and considers that there are potential synergies between its strategy of exploring natural gas and green hydrogen production-related opportunities.
SBE operates Tsetsii Wind Farm, a wind power plant generating 50 megawatts in the Gobi Desert through a joint venture established in Mongolia and wishes to explore the possibility of utilising renewable energy resources in the country to develop green hydrogen energy.
Notably, both parties have been gathering renewable energy data in the Gobi region.
Looking ahead, the parties will cooperate to complement each other to jointly develop and achieve the commercialisation of the project utilising their respective strengths.
SB Energy director and CEO Shigeki Miwa said: “In the context of ultimately achieving global carbon neutrality, there is a growing demand for green hydrogen energy which is produced by electrolyzing water using renewable energy and which produces zero carbon dioxide emissions.
“As a leading renewable energy company in Japan, SB Energy would like to work with Elixir to explore the feasibility of producing green hydrogen in Mongolia in order to optimally leverage Mongolia's extraordinary wind and solar energy resources.”
About Softbank Energy
SB Energy Corp, a wholly-owned subsidiary of SoftBank Group Corp, is a leading renewable energy company in Japan.
The company classifies its core business into three categories - Watts, Bits and Mobility.
The Watts Business generates power using renewable energy, it operates power plants with a total capacity of 723 megawatts in Japan as well as the 50-megawatt wind farm in Mongolia’s Gobi Desert
The Bits Business aims to balance the further expansion of renewable energy and the stable operation of electricity infrastructures through the integration of AI and renewable energy.
The Mobility Business combines renewable energy with battery cells of electric vehicles (EVs) etc to develop associated services.
Young adds: “We are very pleased that a company of the calibre of SB Energy shares our view of the potential for green hydrogen in Mongolia.
“The country’s excellent renewable resources and proximity to potential hydrogen markets make Mongolia a potential tier-one location for future green hydrogen production and we look forward to accelerating our efforts on this front under this new partnership.”